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When thinking about purchasing a property, whether it is your first or fifth time, a mortgage calculator is one of the most important tools you can have to hand.

Mortgage brokers use these tools to calculate loan amounts, interest rates offered by each lender and the length of the loan term. Once you have all of the information, it will calculate exactly how many your repayments will be monthly, annually and throughout the entire term of your loan.

You should also take into account if your fixed rate changes during your mortgage term, this will need to also be calculated as rates and payments may change and you don’t want to be left in the dark.

Another benefit of using the mortgage calculator is to compare lenders rates. Say you are offered an interest rate of 4% from one lender but 3.8% from a second and 3.75% from a third, you can calculate how much of a saving you can make over your complete loan term with just a few easy steps.

The mortgage calculator, in effect, becomes your price comparison website – where you can compare mortgage terms and interest rates from the comfort of your own home. You will be able to see which lender is the most affordable for you and how much money they can save you per month or annually.

For example: A required mortgage of $500,000 over 25 years at a 4% interest rate with one lender equals a monthly repayment of $2,667.16. Now compare the same terms with an interest rate of 3.75% and your monthly repayments reduce to $2,597.15. A saving of $ 70.01 per month, $840.12 per year and a huge $21,003.00 during the entire 25-year term! All from changing the figure on the mortgage calculator which takes about one second. It has now saved you over $21,000.00. Think of the holiday of a lifetime or home improvements you could make with that extra bonus!

Many underestimate the power of the mortgage calculator – while it may not answer all your in-depth questions like your mortgage broker can, it certainly allows you to keep an eye on your money from the very beginning. You will end up going into the mortgage with factual information, knowing exactly how much you can afford to spend each month. This information will allow you to budget for other household bills, such as utilities, taxes, groceries and credit cards.

Obviously as your loan term continues, you may need to refinance or your terms may change - you may even decide to change lenders half way through. This cannot be taken into account with a calculator, a mortgage broker can navigate you through these areas, but it does get you off to a good, solid start.

Some mortgage calculators also calculate the differences between principle and interest only mortgages and repayment figures; this is a helpful tool as well, giving you greater insight into the difference in monthly and annual payments. With principle and interest only payments bear in mind there will be a final balance to pay when your term completes.